According to recent research, the UK’s small and medium-sized enterprises (SMEs) feel neglected by major banks, receiving inferior treatment compared to larger businesses. The report highlights that almost two-thirds of SMEs believe big banks favor larger companies and provide them with superior service.
Nearly half of the SMEs surveyed feel that major banks are restricting access to essential cash and cheque transactions, which are more critical for smaller businesses. Additionally, concerns are growing among SMEs about the shift towards automation and AI, which they fear could diminish the personal service they value.
John Penberthy-Smith, Chief Commercial Officer at Saffron Building Society, commented on the situation: “Despite SMEs’ significant contribution to the UK economy, they face substantial barriers when seeking financial services from large banks. It’s crucial to unlock the potential of these businesses and support their growth.”
Ian Cass, Managing Director of the Forum of Private Business, emphasized the need for better support: “It’s time for big banks to recognize the importance of small businesses and provide the support and services they need. Saffron Building Society is setting an example, and we hope the wider banking industry will follow suit.”
Key Findings:
- Feeling Overlooked: 60% of SMEs believe big banks prioritize larger businesses, and half feel that their needs are misunderstood.
- Need for Flexibility: 73% of SMEs call for greater flexibility to meet their needs.
- Value of Personal Relationships: 66% of SMEs want a Relationship Manager who understands their business, with this preference rising to 93% among larger SMEs.
- Concerns About Automation: 62% worry that increased AI and automation will negatively impact the personal service they value.
- Apathy Towards Switching: Despite dissatisfaction, 65% of SMEs have no plans to change providers.
Saffron Building Society is responding to SME feedback by offering a range of new business savings products, including instant access and notice accounts, with competitive rates and terms. The Society also maintains its branch network and UK-based phone service while introducing two dedicated managers to offer tailored advice.
SME Facts and Figures:
- Economic Contribution: SMEs represent 99.9% of all UK businesses, with 5.6 million operating as of early 2023.
- Employment: SMEs account for 61% of private sector jobs, equating to 16.7 million positions.
- Turnover: SMEs generate around half of the UK private sector turnover, approximately £2.4 trillion.
- Micro-enterprises: Over 1 million micro-enterprises and more than 4 million sole traders exist as of October 2023.
- Business Growth: The number of private sector businesses rose by 46,000 between 2022 and 2023.
- Growth Plans: 86% of SMEs plan to increase revenue in 2024, a 3% rise from the previous year.
- Optimism: In February 2024, many SMEs were optimistic about future turnover and stability.